Student loans, they’re the bane of the millennial existence and constant topic of contention in the United States. Understanding the ins and outs of student loans can be intimidating, but it is essential for your financial future.
So, how do you pay off student debt? Here are our top three essential things to know.
Know What You Owe
The first thing you have to do is learn how much you owe. Your current debt is likely more than what you signed on for because student loan interest accrues while you are attending school.
What does it mean for your loan to accrue? Well, even though you aren’t required to pay your student loans while attending school, you are still being charged interest. That interest is being added to the sum of your student loan every day since your loan was dispersed.It can be scary but knowing what you owe is the necessary first step to your student loan repayment.
When to Repay
Typically, student loan payment begins after you graduate or drop your course load to be less than a full-time student’s. Twelve units is a full time course load for under graduates, so if you’re taking less than that, your student loans will begin.
Federal Student Load Deferment’s Effect
The COVID-19 pandemic has impacted the status of federal student loan repayment. Since March of 2020, student loan forbearance began, and has been extended to Aug. 31, 2022.
During this period, federal student loans have maintained a 0% interest rate and mandatory payments have been paused.
It is important to note that this only impacts federal student loans, your private student loans have likely continued to gain interest throughout the pandemic.
Evaluate Your Options
Did you know you can refinance your student loans? Refinancing could potentially get you a lower interest rate, making loan repayment a little bit easier.
Be cautious when refinancing your federal student loans, because you will forfeit the potential opportunity of federal student loan forgiveness.
Consider all of your repayment options but be cautious with your debt.